United States Bankruptcy Judge Brendan Linehan Shannon has approved a plan by Fisker Automotive Holdings Inc. to borrow $4.98 million from Wanxiang Group. Fisker will return to court March 21 to ask for approval of the rest of a $10.5 million debtor-in-possession loan. The new financing will replace an $8.1 million loan from Hybrid Technology LLC.
Hybrid terminated the financing agreement and declared all principal and accrued interest due after Wanxiang won court approval to acquire the carmaker’s assets. Fisker filed for bankruptcy protection on Nov. 22 with a plan to sell its assets for around $25 million to Hybrid, which held a US government loan that Fisker had defaulted on.
However, Fisker’s unsecured creditors objected to the price and helped bring Wanxiang into the matter in December 2013.
An auction was held in February with Wanxiang winning against Hybrid after 19 rounds of bidding with an offer that included $126.2 million in cash, plus equity and $8 million in assumed liabilities. Wanxiang’s acquisition still requires approval from US antitrust regulators. Fisker listed assets of up to $500 million and debt of up to $1 billion in its Chapter 11 petition.